What Is A Pell Grant Scholarship?

Written by Michael Bennet

A Pell Grant scholarship is a federal educational grant that is awarded on a yearly basis, and because it is a grant it never has to be paid back.

People sometimes refer to the Pell Grant as a scholarship due to the fact that it can provide students with aid that never has to be repaid, but technically it isn’t scholarship, and it therefore shouldn’t be referred to as one.

Regardless, just be aware that when people state the phrase “Pell Grant scholarships” they aren’t referring to a different kind of aid that may be similar to the Pell Grant, and most of the time it is simply a reference to the federal Pell Grant program.

That being said, what are the commonalities and differences between a so-called Pell Grant scholarship, and an actual scholarship, as this is where many students and families get confused.

Pell Grant and Scholarship Similarities

Don’t have to be repaid under normal circumstances.

Provide thousands of dollars in aid towards higher education costs

Used in conjunction with other forms of financial aid most of the time.

Available on an annual basis.

Pell Grant and Scholarship Differences

Pell Grant is based on need, scholarships can be based on merit, along with a number of other factors.

Must apply for a Pell Grant via a FAFSA. Scholarships can be applied for a number of different ways.

The Pell Grant is awarded by the Department of Education and is a form of federal student aid. Scholarships can be awarded by numerous parties, including colleges, high schools, and even local civic organizations.

Almost any student who is attending a postsecondary institution can receive a scholarship, while Pell Grants are only given to students who qualify for federal student aid and can demonstrate the appropriate level of financial need.

Final Note on the Pell Grant and Scholarships

The Pell Grant is only given to students who have not yet paid for their cost of attendance via financial aid, or other means. Getting enough scholarship aid to fully pay for the cost of attendance of going to a particular institution can nullify a student’s ability to get a Pell Grant for that award year. Receiving Pell Grant aid when this is the case can put the student at risk with regard to having a Pell Grant overpayment be stricken to their record, which can make them ineligible for any sort of future federal student aid.

This is why it is critical for students to inform the financial aid department at their college about any, and all types of financial aid that they may be receiving for any particular award year, as not doing so may result in the disbursement of funds that were never supposed to be credited to begin with. A good rule of thumb to keep in mind is that if you’re receiving a full scholarship, you most likely will not be able to become eligible for the Pell Grant for that particular academic year.